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tv   Fast Money Halftime Report  CNBC  June 12, 2013 12:00pm-1:01pm EDT

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years until this is done. i'm sure we'll have our viewers inside once it's finished. >> we'll see you on "street signs" an later tonight. thanks, robert. we the dow is down 66. we looked like we were going to open with triple digit territory and we did. >> we've got another triple digit swing for the second week. >> 7 of the last 11 sessions have been triple digits. let's get over to headquarters and scott wapner and "the halftime." >> thanks so much. welcome to "the halftime show." hourtion to four hours to go until the close. here is what we're following. let's get cyclical. for get dividend plays. one of our guests says it's time to look elsewhere. still got game? it's been a great year for shares of game stop but what's the play with the big e3 event. our top story, playing the volatility. stocks up, stocks down, stocks
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all around today. another volatile session. the dow has had triple digit moves in 7 of the past 11 trading days and judging by today's action, there looks to be no end in sight. the vix is also making big moves. we're trading it all. stephen weiss how do you play this volatility? >> this volatility is scary. it seems to me just from my experience, and i'm going to do this from my normal state which is without any statistical backup. it seems to me that when you have this many triple digit moves, this much volatility in the markets, that it never ends well. so intermediate term, longer term, still bullish but we're entering a summer of discontent. at least that will be june, possibly into july, until we get the next fed meeting and that will give us more clarity. >> you put out a note this morning that said you're very bullish. why not use these dips because of the volatility to take advantage of that position? >> well, actually i'm going to
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accuse the producers of what i accuse a lot of the analysts of doing which is just reading the headline. it said i'm bullish but not bullish short term. taking off some risk. but i do still believe we're on the cusp of one of the greatest bull markets ever. it's just a question of where you pick your entry point. >> where do you pick that, simon? >> i think you have to be very much long the market, scott. to what weiss was saying, the summer of discontent, i'm not sure if i agree about that but you have to be concerned with yields going up. but i still think the absolute trade, we'll talk about cycli l cyclica cyclicals, over the staples, is the way we go. we continue to buy the dips. >> what are you buying? what are you picking at? >> you continue to buy the names that continue to work. gm. in the housing market, the wells far goes. the simpson strong ties of the world. when they're dipping, buy them. what we're seeing consistently, when the market recovers, it
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recovers really, really quickly. that's where all the hedge funds are really -- they haven't been long the market. >> financials, when you get a dip like you did yesterday, citi, that's when you have to step up. still good groups. >> that leads me right to pete. are you a buyer of the financials? >> i'm not. we've talked about the volatility indexes. five closes have been above the 200 day moving average and actually two of those have happened already in june. today i think we'll set up for number three. what are we looking at the market in i think in the past it's been an opportunity on the dips you want to buy. i don't think that's the case anymore in the financials. i don't think that's the case in the market because of the fact take a look at the eem. yesterday we talked about the enormous put volume that's been going on over the last month or so. but specifically thursday and friday last week and then when you look at the financials, first area today that turned into the negative territory was the financials. it tells me right now that i don't think we're seeing that,
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a, let's buy the dip each and every time we get down there and look at the way the volatility index has skyrocketed over the last couple hours of trading. >> so your overall view of the market is trading? >> far more negative. i was a bull. we're seeing bank of america on the dips people buying options, citi, jpmorgan, we aren't seeing that same kind of activity. when you add the emerging markets and the volatility index. i think it's reason to set yourself back, look for opportunities but i'm not seeing them right now in the financials. >> doc? >> to that eem trade, obviously some very smart money over the last let's say week has been very aggressive. in fact, they started buying these the 24th, just into the memorial day holiday. then they rolled thim down. we talked about it here on the show. pete talked about the activity that accelerated this week and pushed out to september. now, that's just the emerging market space, but volatility moving up like this, judge, when you're getting let's say 17
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handle move out of the s&p 500, 17 big points out of the s&p, that's, of course, a 1% move. and that justifies a -- >> what are you watching more than anything else? is it the vix? is it the dollar? is it the yen? is it rates? >> you have to be looking at the yields, right? you have to be looking at the rates going up. that's really kind of spooking the market. i think the vix is an indicator. if you want to play that by the vxx, the etf, but i think the most concerning thing is the yields. >> i'm watching a market that's had a huge, huge run, a lot of people are saying, you know what? summer is coming, it's a slow time typically, we'll get lesser volumes that rule. i don't expect to pull money in here. here is what's mitigatinmitigat. you're going to go into earnings season where i believe expectations will come down. that's the buying opportunity. that's why i have lower exposure than i did a month ago. >> people were saying sell in may, go away.
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>> i didn't sell in june. sell in may is a couple years ago. now it's the next phase where it's not sell in may, it's sell in june. >> welcome to 2013. >> that's right. >> doc, you were going to say something before. >> i think a lot of it is -- how much of it is directed by the fed. is it orchestrated they want somebody who is a hawk to come out and say we don't think the economy will be impacted as much like greenspan said an our air. we don't think the economy will be impacted when we start tapering. they want to float these trial balloons and get people sort of numb to it. during that period when they're doing that, that's why the market is seeing the volatility. we're testing the 50-day moving average. >> i think the yen is probably causing a lot of volatility. let's bring in paul richards, runs fx distribution. welcome back. >> how are you? >> paul is joining us on the phone obviously. is this how it is? is the yen the thing we should be watching most?
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a lot of people are fixated on rates. >> it's not the yen. this is a mistake the market is making today. the problem is the dollar. the reason it's the dollar, if you look at the dollar, the dollar has sold off in the last 24 hours against all emerging market currencies. it's the first time in two weeks. it sold off against the gen yen, franc, euro, and sterling. that's across the board. the market in my opinion further to our discussion last friday, they're waking up to the fact that maybe it's not goldilocks. maybe the fed does something next week at least in terms of signaling, so my sense here is that the market is pricing at least the possibility of the fed moving. now, whether they do it or not, a week is a long time in a market and i think the market has very, very spooked here with one week to go until the q & a with bernanke. >> but rates clearly seem to be grabbing attention of market
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watchers. >> and they should but i think rates are going to stabilize here. we went to 229, we're back just under 220 now. i don't think there's any justification to take that through 230. last year's high was 240. until we know exactly the fed's intention. i think rates stabilize around 220. i think you will get a lot of volatility in markets in general but also we could be starting to see here something of a cyclical move out of the dollar and more into say european -- european markets are doing better when you look at some of the numbers. the uk is doing particularly well. people are establishing some value now in emerging markets. we're seeing the big sell-off. so i think to an extent what we're seeing is hedging out of the u.s. into other markets. >> paul, it's steve. it's a little counterintuitive to have a lower dollar hurting the equity markets because it helps your exports. particularly if you take a look at europe, europe came out and said -- the ecb came out and said we have room to do more with rates. perhaps this is just a
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short-term phenomena. i don't really think that's what -- i saw the correlation but the dollar was down big today anyway before the market started trading down. so i don't think that's the reason the market sold off this morning, late this morning. >> look at the charts though. >> i think the markets are just concerned in general. look, you know, there's no question if the euro would get up near 1.35 i think somebody like draghi we start to hear a comment like negative rates. i don't think europe wants to see the euro rally too much from here. i think this is general volatility as we approach a big event next week. the markets don't like volatility. they don't like uncertainty and i think you talk to a lot of clients the last ten days to two weeks have been pretty tough in terms of revenues. i think we're going to see a lot of nervousness until we get direction and you're not going to get direction for another week. >> and you won't get it after that either i don't believe. >> you may not. >> paul, good to talk to you as always. >> no worries. >> our next guest is an iconic market watcher who thinks the
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best opportunities may lay outside of the united states. byron wien is live now from new york city. >> good to be here. >> i'm sure you were listening to the conversation. >> i was. >> you have seen the volatility sort of amp up in recent days. what do you think? >> well, i think that the market has come a long way. it was up 16% last year, more than 15% so far this year. we're only less than six months through the year. i think while valuations are still fair, i think the market has made a lot of progress, and i think there's some trouble ahead. >> what's the trouble? >> the trouble is that profit margins in my opinion have peaked, and that earnings are going to be disappointing in the second half. and that's what the market is beginning to sense. it isn't so much the fed. the fed may taper, but if they taper from 85 to 60, that's still an enormous amount of liquidity being poured into the market, and in my opinion three qun quarters of that liquidity
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goes into financial assets, not the real economy. >> how do you get the market to believe that? to believe that a taper is not such a bad thing that everybody thinks it may be? >> well, i don't know. you know, i have trouble enough analyzing myself much less the market. but i think the -- the market is looking for certain kinds of reality. tapering is a negative. a disappointment in earning would be a negative. evidence that profit margins have peaked is a negative. and i think there's some negatives ahead, and i think the market has done very well. do you realize that it's been up four months without three down days in a row? >> yeah. i don't think there have been three down days on the dow this year as a matter of fact. >> well, maybe not. but you have to go back to 1935 to find another period like that. >> well, what scares you most besides earnings? what's the tell on what stocks
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are doing here? what do you make of the move in rates? how concerned should we be by 2.20 ten-year? >> 2.20 ten-year is still very low yield. if you look at history, i have studied interest rates back to babylonian times. you look at history, the ten-year usually trades at about the nominal growth rate of the u.s. economy. that's 2% real, 2% inflation. so the normalized rate for the ten-year should be 4%. so 2.20% is still a long way from 4%. there's a lot of room for rates to rise and i think maybe we've seen the low in rates and one of the reasons the market is a little skittish here, it's anticipating higher rates. >> maybe it's the velocity of the move higher that's scares people the most. >> yeah. it's -- rates have moved up very far very fast. >> so byron, if you have seen the bottom at rates and if you're worried near term about
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the equity markets, where are you putting your money then? >> well, you know, there are places abroad. things are better in europe. that was a point made earlier in the show. europe has clearly moved away from its austerity addiction and is focused now on trying to restore some growth. so i think there are a lot of cheap stocks there, and that's one place i would look. i'm still positive on the emerging markets. but i think you have to be very careful in stock picking there. so i think there's some places outside the u.s. i still think that some very high yield securities are attractive, mortgages, leveraged loans, mezzanine financing. i think there are opportunities at the riskier end of the fixed income market but those instruments are equity-like. >> byron, the emerging market calls an interesting one. those markets are getting hit pretty hard. maybe it's partly on the view that the fed is going to taper
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or step back some. why would you believe that any of those markets are the place to be and that the u.s. is time to move money away from? >> well, unfortunately, the emerging markets usually move in sympathy with the u.s. but i think valuations there are getting very attractive. >> byron, it's got to have you on. >> good to be here. >> byron wien. coming up on the half, game on. shares of game stop recording their biggest gains in over four years but should you take prafts now? the question sparking a street fight you won't want to miss the world of high speed trading 500 mill give seconds is an eternity for traders. >> when we come back, i will explain to you how some traders are getting a two-second head start on market moving economic data. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first.
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welcome back. want to show you what the markets are doing right now. volume tilth is back and back in a big way. what started out as a strong day has turned into this. the s&p 500 is now down nearly 10 points. the dow is working on nearly a triple digit loss at this point down more than 80 points. being droged down by utilities, discretionary, financials, dollar/yen getting a lot of conversation on the street as are higher interest rates. we take a look at the ten-year at 2.18%. around 2.20% or so seems to be a line that's sparking some concern in the markets but there's a look at the ten-year yield. a day when the volatility index
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is moving higher. our markets may be free but are they always fair? are some elite groups paying for a split second advantage? cnbc's eamon javers is looking into that story. >> we have obtained a document that shows a closely watched consumer confidence number that routinely moves market is accessed by an elite group of traders for a fee a full two seconds before its official release. a contract signed by thomson reuters and the university of michigan which produces the widely cited economic statistic stipulates that the data will be posted on the web for the general public at 10:00 a.m. five minutes before that the data is distributed on a conference call for thomson reuters paying clients who are given certain headline numbers but the contract carves out a more elite group of clients who subskrub to the ultra low latency platform.
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they receive the information in a specialized format tailor made for computer driven algorithmic trading at 9:54:58.00 according to the terms of the contract. here is the real world effect. take a look at the chart provided to us by the analyst firm nanex. you will see trading in the etf on may 17th. the red line to the right is 9:55 a.m. but you can see the trading exploded two seconds earlier at almost exactly 9:54. . here is what thomson reuters told us. details are provided openly to thomson reuters customers and the wider public and anyone wishing to trade on this data can pay for the services that best meet their data needs. thompson reuters also said it fully discloses the two-second lead time on its website. this is extremely valuable data. the contract show that is thomson reuters pays the university of michigan at least $1 million per year for the
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exclusive right to distribute it. scott, back to you? >> thanks. doc, you're shaking your head. pay to play. >> shame on reuters, shame on the ftc. this isn't anything that makes it fair. it disrupts the markets obviously as eric over at nanex has cited on eamon's report. this is just terrible. this is not something that will help markets. it will be something that destroyed markets, and i'm just -- this is almost like that nsa spying, judge, because basically it destroyed confidence by the general public. so i'm outraged. this is terrible. >> steve weiss? >> all that being said i will split the price of a subscription with you. >> no you won't. >> he's taking the other side on not this specific case at times but on the issue of -- go ahead. >> so market is supposed to be fair, i agree with doc, but the
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issue is how do you legislate out capitalists being capitalists. and that's part of it. here to me it seems pretty easy. if you have the money to put up just as if you have the money to travel to corporate headquarters -- >> but that argument doesn't hold up. that's always the argument for the smaller investor that -- >> that's why i agree -- >> or any of that kind of stuff. i completely agree. it's completely not fair and completely ruins confidence when those sort of stories come out. >> confidence is the one thing -- >> i'm not defending this. >> 2010, that's the biggest problem we faced was they didn't feel, they being the small traders, the retail environment, did not feel like they were getting the right look at the market and now they're seeing this. this absolutely destroys -- >> hold on. so you're at university of michigan. you invest all this money in this -- in your data collection a fortune. what are you supposed to do? give it out to everybody equally?
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>> yes. don't i think that's what bloomberg and everybody else -- >> by the way, shame on michigan for doing this. shame on michigan. >> who is to say that doesn't create the opportunity? we see what it did two minutes before, a minute before, or even a tenth of a second -- >> why should somebody have access to proprietary information or nonpublic information regardless if they pay -- >> how do you handle it. you have the university that's going out and building this database. that costs money. what they're using this data for is spending habits. >> maybe the best vote the all is for the market not to pay any attention -- >> how many times do you trade off these numbers, the sentiment numbers, to find out if they're head fakes or they're wrong? so maybe you should say that's the opportunity. these guys are going out and buying in advance of the number and the number, guess what, it doesn't mean anything. so, sure, the next tick was down
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but maybe that's the opportunity to get in. >> a cheating scandal at a school, that's badp rsmth for the school. this is bad pr for michigan. it's bad for reuters. it's bad for the s.e.c. like we've said. this is not -- >> university of michigan has a product. thomson reuters is willing to pay for it. >> shame on them. >> why shame on either of them. >> it comes down -- >> maybe it's a regulator issue. >> it's exactly a regulator issue. the regulators should be there to make sure stuff like this doesn't happen because if i could buy insider information about some company and the regulato regulators didn't care, i guess i should do it. >> for a school like michigan it comes down to ethics. they teach classes like ethics -- >> they're not doing anything illegal. >> scott, you come onto the show, we're not allowed to talk about the stocks we're going to do, specifically weiss because everyone trades exactly the
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opposite whatever weiss is going to do -- >> but it's a beautiful thing. >> but it comes down to ethics and a fair, level playing field. i think it's dreadful. >> we'll leave our free markets/fair markets discussion there and we'll do the biggest pops and drops. first up, spectra energy, 10% pop. >> and it's a huge pop. they got a couple upgrades out there talking very positively about this but go back to may 30th. some huge coal buying. september 33 calls. they were trading at 40 and 45. today $1.75. >> jcpenney or freeport-mcmoran. is popping. >> they closed a mine. what that means is they don't have to live up to those prices and those commitments. that shows big capacity. however there's more capacity coming on. >> tesla. >> tesla, increased their price to 190 on the stock. basically said the bear case has been overcome. they like the position here so
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the generation three car looks on track. our opinion, stay the hell away. >> first solar. >> 8.5 million shares. the stock was down $4. hit hard on the news and goldman came out and defended them. the stock has rebounded off the lows. we'll see about that 50, whether it holds there. >> we're heading to the floor of the nox new york stock exchange to get some answers on the volatility. nat gas, is the pain in nat gas over? >> every morning the markets take off. at noon halftime report puts it in context. with the news driving the markets and debates making the news. get a jump start on the afternoon. >> "halftime report" real money, real debate, week days at noon eastern.
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the markets are volatile yet again today. let's bring in steve grasso now. he joins us from the floor of the new york stock exchange. welcome back to the show. >> thanks. >> what are you going to make of this incredibly volatile turn that stocks have taken in the past week or so that every day are bringing these wild swings,
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7 of the past 11 trading days, as we've said, the dow has had triple digit moves. we're up 150 or whatever we were up, more than 100 points today, and here we find ourselves almost down 100 at one point. >> if you throw in -- it used to be just ben bernanke we're looking at. now you look at the yen. europe is even in the background right now. so the carry traders there, if you see the yen rally, we tend to sell off but guys don't know what to do now. is the market fairly valued? it used to be good news was good news, bad news was good news. now it's bad news is bad and good news is factored in. so guys are waiting for this market to break one way or the other. >> what about rates? are you going to look back at this volatility and not necessarily you specifically but those who are getting a little more concerned about what they're watching in the market and look back at this a month from now and say, darn it, i had my chance to buy this market on any of these dips and i missed it because i was too scared?
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>> yeah, you know, there are certain things you look to in a rising rate environment. you look to the material stocks, growth stocks, material because of inflation. you look to growth because you just want to fight your way out of it with tech. you know, i don't know. i don't think you're going to kick yourself though. >> are you worried about the move in rates? >> i am. i mean, i think everyone is. i think everyone has been saying on this channel and, you know, all wall street pundits have been saying if rates go up, the market is going down. so i think that's put a healthy fear into the market participants. >> are you telling me 2.20% is the end of the world? >> i don't think it's the end of the world but i think the speed at which we get there, that shook a lot of people up. if it was more of a sustainable level and we could breathe a little bit easier, i think that's a lot easier for the markets to digest. >> yeah. >> you do want to watch though 1598 in the s&p cash, 1687. those are your borders right there 37 if. if we break one way or another,
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it's good for 50 or 60 handles. >> happy birthday. >> thank you, sir. nat gas is gabing some ground rising more than 1% for its first positive day in a week. let's go to futures now and jackie deangelis. >> here is what's interesting. nat gas touched a three-month low in the overnight session. that was before rising nicely on the day. so anthony at the nymex, do you that the nat gas, the pain we've seen, it's finally come to an end or is this a short term bounce? >> jackie, i think you will see prices higher as we get into the summer. i don't think the pain has ended at all. we're at an 18-year low as far as count goes although fragging has taken a part of that away. but the overhang in supply is gone. every day you hear nat gas being used for something else whether it be replacing gasoline, heating oil, coal, and now nuclear energy in california. we're in the beginning of the season. so i see prices higher from here. >> jeff, do you agree with that point of view? do you think the bottom is somewhere around here?
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>> well, i disagree and agree. let's go with what his long-term perspective is. it is bullish. we are going to see gnnat gas g higher. part of the reason is the electric power plants. there's another 50,000 megawattsen to be retired. switching from coal to nat gas. this is called fast money. hop on here. this is the short-term trade. we are seeing a very meek and mild weather forecast, and on top of that we are seeing a large injection of inventory. right now we're seeing this -- pull up a chart. we see 382. that's a very, very key technical level. i'm looking to fade it and be short because i want to see more pain go down to the 350s. we're on opposite ends here but i agree with you long term, bud. >> i'm long actually right at 382 even. i see support at 71 and 65. i don't think we're going to break through either of those. >> all right. you heard their thoughts.
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now we want yours. has nat gas found a bottom? vote on >> when we come back, it's game time on halftime. after a 17% runup in two weeks, a game stop getting ahead of it. two traders battle it out so you can make the trade. and what stocks will outperform in a world of raising rates. kim forrest has three names for you to consider when we come back. time on halftime. everybody has different investment objectives,
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games stop the world's largest video game retailer coming often its best gain in some years yesterday. an a 50% run up in 2013 alone, is it time to take some profits? we debate it now. dr. j is the bull, simon baker is the bear. dr. j, make your case. >> they just gave us some great
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guidance and the think the sony playstation 4 as well as the xbox 1 platforms, first time we have a bunch of new platforms coming on the market at the same time. a bunch of games, of course, have been written for those consols already. grand theft auto 5 as well as bioshock and some of these games you play like sim city, i think these are going to be big. >> hey now. >> and i think additionally the fact that sony, which could have -- the microsoft move if they kept people from renting games, scott, by you can only use it once, that's the way microsoft was allegedly going to go. instead sony has gone out and said on our platform you can take any game and play it on here. that put pressure on microsoft. that's good for game stop. >> here is the problem with all ha. that's all great, good, and well. digital. think of blockbuster, think of pc sales. one of the big announcements coming out on the consol, the same day it comes out you can download it digitally on the consol. that's 70% of pc sales. >> what do you do you with the
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used games? >> let me dress that in a second but that's a really good point. second thing microsoft announced, they're not going to charge on reselling the used disk, et cetera, et cetera, but they're going to allow the publishers to limit the amount of used disks being sold. those are two big problems on a digital side. secondly, you look at the balance sheet, they have $200 million in cash, paying 3.7% in dividend. it's not sustainable at all. another announcement came out with apple when they talk about how they're going to increase the margins, they're going to sell the iphones back in the iphone shops. that was part of mobile they have no longer. the stock is up 50%, 13 times earnings. it's expensive. i'd rather own the operators. electronic arts for example. i think it's a great short. >> can we go to the jury now 1234. >> yeah, let's just not go to weiss. >> steve weiss, who made the more -- >> i'm tempted to go with simon because rarely have we seen him
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so prepared however i'm going to pete -- >> john, he looks like me. >> that's when he buys the stocks. i like the dividend. it's cheap. ten times next year. i agree with simon long longer term but i still think that you see game stop do very well. >> tell us who you think won the debate. tweet us @cnbcfastmoney. we'll give you the results at the end of the show. interest rates, let's talk about those again. they're rising. and our next guest thinks it's only just the beginning. kim forrest manages more than $1 billion at fort pit capital. she has some names. kim, good to see you here on set. >> thanks for having me. >> this move in rates is changing the way that you're playing this market. >> well, we've been anticipating that we can't have these rates that low for that long, so i wouldn't say we're anticipating the exact move but we knew that this day would come and here it is. >> let's put it to you this way. if you didn't know it was coming
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maybe right now or at the speed in which it did, you think they're going higher from here. >> yes. >> and that's changing the way you're investing in this market. >> well, we've been leaning more towards looking for growth names rather than the, you know, dividend kind of paying names. so -- >> like the utilities, they're a no. health care, they're a no? >> they're a no. and financials, although, you know, the spread might help them, nobody seems to be wanting -- nobody who has -- or who can pay back seems to want to borrow. so, you know, we're just not looking at financials. >> you're going to pick a good fight on the desk about that. >> the reason why rates are going to go up is because the economy is improving. >> yes. >> when the economy wasn't improving i agree, there wasn't loan demand, there wasn't loan growth. >> yes. >> but if the economy is improving, you're going to see that happen and that's when you own the financials. not only for the spread but for that. >> well, i'm not going to disagree with you but i'd rather
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put my money elsewhere. let's do it that way. i'd rather go to the growthier names, names that i know are probably not going to have to borrow money because they're generating cash. those are the sort of names -- >> you're talking cyclical. s? >> i'm talking cyclicals. >> like what? >> we have moved into intel. you can throw that baby out with the bath water and say they're a pc-only company. we don't believe it. they generate a lot of cash. they return it to shareholders and they won't need to borrow to be able to do what they do. so that's where we want -- >> like a stealth mover, too? google gets a lot of conversation, microsoft in the big move they've had gets a lot of conversation. >> they have move toed to mobile. they have done a great job getting themselves positioned. are there other names in tech? is microsoft on the list? >> microsoft is on the list. not because of the games. i'm not an xbox kind of girl but
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i love them because they are an i.t. play. you're not going to boot them out of your data center. sorry, google, you're not going to replace word with google apps. they really are an i.t. proxy. and i think they're here to stay for the long haul. >> let me get another pick of yours being boeing which has had a fantastic year-to-date despite some of the issues with the dreamliner in the past. >> yes. and, you know, that dreamliner, it still is bleeding cash but they have plenty of very profitable planes that people want. they also do extremely well if book to bill is overone and we think that's going to happen through this year and into next year. boeing is still on our list and we really like boeing. >> one quick question with all the concern, because a lot of that backlog is from the emerging markets, you sti they're still pretty much intact? >> i think so. there's a lot of cash still in those markets. they may not be growing as fast but they're still going to be growing and they want to travel,
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and that's that. get the heck out of asia. that's right. >> let me get your quick read on joy global. >> yes. >> gold down. miners have been hit. global economy weak. why joy? >> joy is really a coal play, and i strongly believe back to asia that it's going to be very, very big if first china and then india. both of those markets need coal for electricity, and joy has a really good track record of having operated there since 1979. they did an acquisition. unlike cat they actually bought a company that made stuff, and, you know, they're doing okay in that country. there's been a slowdown but over time i think they're going to be just fine in that area of the world. and that is a coal play, not necessarily a gold play. >> kim forest, good to have you on. >> thank you for having me on. >> great to see you here. today on the big data download, apple rolled out a host of updates at its developers conference but are
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there better clues on the company's future elsewhere? find out what the supply chain is telling investors today. up next on "the half," shares of ultra salon are surging. solid outlook giving the stock a boost. herb greenberg has a problem. he seems some warning signs. he'll tell what you they are when "the half" comes back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. just by talking to a helmet. it grabbed the patient's record before we even picked him up.
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coming up on "power lunch," it's a story we are all over here at pl. an elite group of traders getting access to closely watched economic data that routinely moves the market before it's official release. how it's stacked against the individual investor once again. would you pay a monthly subscription to fly as much as you want on an airline? well, one airline is betting that you just might. in fact, that you will. we'll take you on a flight. and jpmorgan's jamie dimon daring anyone planning to sue his bank over the london whale losses to go ahead, make his day. he's ready to fight back. is dimon stronger than ever? scott, back to you now. >> tyler, thanks so much. let's send it over to seema mody. >> royal bank of scotland ceo steven hess hester to step down in december. he will not receive a bonus in 2013 and the search for a successor will begin
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immediately. the stock moving lower down about 2% on the day. scott, back to you. >> thanks so much. shares of cosmetics company ulta are on the move after they said net profits moving by 20% but herb gren beenberg has some warning signs. >> it's a big beat. let's not forget a quarter ago the company came out and offered first quarter guidance. fiscal '13 guidance that was well below expectations. the company comes out beats that well below expectation guidance and by the way, gross margin down 100 basis points. but, you know, they said it was going to be down 140 basis points. man, down 100 basis points. they got some issues here. >> you're saying this is a relief rally we're seeing. it i want as bad as some people thought? >> this is a wall street does not care about the fundamentals story. there are many people i talk to
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that look at the accounting of the company. they believe the accounting is very aggressive. you look at the online sales of the company. the online sales, hey, they look like they are up quite a bit. the company said on their conference call that they're taking business -- the online sales are coming from current customers. there are things going on here. inventory is up 33% versus 23% increase in sales. by the way, the 23% increase in sales, that's a flat -- it's a nice gain but it's the same gain as it was a year ago. by the way, one other thing, ceo, still an interim ceo. remember we lost the ceo a few months ago -- >> keep having stock performance like this maybe he will get the interim title removed. >> what are we on our third cfo in a short period of time? there's a lot going on. you have this beat. wall street has short memories. i say there are issues. be careful. >> anybody on the desk want to take this one on? >> but it's two separate issues. you had cummings engine which missed repeatedly.
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reduced expectations -- beating reduced expectations is what the market has been about for the last couple years. that's a separate issue. as far as the other things you mentioned, i would want to know why inventories are increase relative to sales. i so it's worth looking at. if only a 10% short interest. there's room. >> and your point about the cannibalization as well is an interesting idea. everybody talks online is the incomes growth engine, but if they are stealing it from themselves. >> a low margin business, online, a lot of promotions help goose the sales higher. it's a messy quarter. i would argue a low quality quarter, but in this market -- >> with ceos, some speculators look at that as a positive thing, and the stock might very well sell off when they announce a ceo. there's nobody here to take over. >> herb greenberg, thanks. coming up, you asked for it on twitter, so our pros will give you the trades on stocks you tweeted about so you know how to make your next move from
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not so fast, simon baker. our traders are quick, but they are not always right. back in april, simon baker, the big trade-maker, made a bullish bet on facebook. let's take a listen. >> the mobile ads are improving and you're seeing some actual -- >> gm announcing yesterday the new test again. >> looking good. new facebook phone coming out. early reviews look very, very positive. those are the kind of data points we'll be looking for. >> you're a buyer of the stock? >> absolutely, longing it.
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>> shares of facebook have dropped 13% since that call. just yesterday the company held its first ever shareholder meeting. bakes, what do you makes on this one now? >> maybe i was a little bit early, but things are changing. they came out with a good research report on june 10 that says the most compelling internet trade going on right now. they are going to be joining the s&p 500 very shortly which i think will be a good catalyst. it's back to school -- >> most compelling internet trade right now is facebook. >> that's what is said. i'm prepared for this. >> i understand that you're saying you agree with it. >> i won't say it's the most compelling but certainly in a basket of internet stocks, a core holding. back-to-school seasonality. they will figure out how to make money. these two keep instagram every two minutes. it will be impactful sometime and i think they will get a good job on it. people will be following. bottom down and the stock is going higher by the end of the year. >> do you agrees with baker and the call? >> sure.
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i don't know that it's the most compelling. that part i don't agree. it was a bit of a cricket moment. i still like the stock. i own the stock. i think it is going to go higher. i think the ceo finally aggressed all these issues. >> let me ask you a question. why do you still own this stock, and why are you staying with this stock, a stock that's done -- >> initially it was terrible because -- >> the stock was a big tease. >> i'm still one of the believers and i know josh brown and some of the guys question the 900 million, how many users there are out there. even if you cut that number in half or less, you're still talking about a huge audience of people you're in front of each and every day. >> the big question is do you believe that they can monetize mobile, and if the answer is yes, you have to only stock. >> and they have done it now. >> 30% of their revenue. >> that all sounds great, so why can't the stock do anything? >> because i think there's a lot of folks who have been selling all the way down to the 24 level or so. i mean, you look at the volumes on the down days, and the spikes that are in those volumes. that tells me, probably -- well,
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it's not zuckerberg because he'd have to declare it, but it's somebody with a winding position. >> you have no take on this? >> i want to buy the stock but every time i go to buy it i can't find a compelling reason to do it. expectations are too high on mobile so while it's 30% of revenues, the revenues don't support the stock right now. >> when we come back, we'll tell you who you think won the debate, and we'll also get your final trades. before their gift helped preserve the point... before a credit solution was used to expand their business... before trusts were created for their grandkids' educations... they chose a partner to help manage their wealth... one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust.
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all right. we've at allied the results. you've said simon, the bear, won the debate. >> nicely done. >> final trades. pete, you're up first. >> i like starbucks. earlier we were going to talk maybe about philip morris. starbucks is one of those names also addictive. >> bakes? >> volatility not going away. buy vxx. >> doc? >> select comfort, like the luxury bed-makers. >> weis? >> ubsy, buy protection for the
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portfolio. >> you asked for it. a couple quick ones, corning, buy, sell, hold? >> sell my stock right about here frankly out of boredom. keep trying to make gains. >> that wasn't exactly buy, sell, hold but it will have to do. >> i sold mine right here. >> because of that, that does it for us. >> that's it. >> great rest of the day. "fast money" at 5:00 p.m. follow me on twitter. "power lunch" starts now. "power lunch" and the second half of the trading day starts right now. >> all righty, scott. thank you very much. another volatile day on the markets. moments away from more potentially market-moving data. there you see the dow, down 56. s&p down 6.5. nasdaq down 20. the dollar down a little bit, and there's the ten-year note, the yield at 2.19. free markets, fair markets, and another case of how it may be stacked against individual investors like you. and an elite group of traders getting access to closely watched economic data that routinely moves markets, but they get it before the official release. cnbc hashi


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